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Saving, Investing, and Retirement Score 4 Score 5

5 steps to plan your financial life

Salary Finance
By Salary Finance
3 minute read

When it comes to planning your financial future, it can be difficult to know where to start. This checklist includes five steps you can use to identify the actions needed to achieve more of your financial goals. 

Of course, you’ll need to pay down any expensive debts and have a sufficient emergency fund before making longer term investments. But this planning process could motivate you, whatever your current situation, by helping you visualize a future in which your money is connected to what matters in your life – your goals for yourself and your loved ones.

And that’s what you’ll achieve if you follow the steps in the order we’ve set out here – starting with your needs and goals before thinking about products and solutions.

Whether you plan your finances on your own, or with help from a qualified financial planner, this checklist should keep you on a solid set of tracks.

  • STEP 1: Develop your ideas for what you want in your life
  • STEP 2: Check if you’re on track to achieve your life goals
  • STEP 3: Adjust your plan to get on track and stay there
  • STEP 4: Plan for the unexpected
  • STEP 5: Put the plan into action

Step 1: Develop ideas for what you want in your life

This step is about finding out what’s really important to you and developing ideas that will inspire you – it's about much more than just money, because a lot of the things we value most in life cost little or nothing at all. Invest some ‘quiet’ time at this stage to carefully consider what really matters to you.

What do you want for yourself and your loved ones for your longer-term futures? And don’t worry if you’re not clear on what you want right now. You can start this with a single idea, like buying a home or retiring early, for example, and then find other ideas to add to your list later.


Step 2: Check if you're on track to achieve your life goals

From your life goals in step 1, pick out the items with a financial cost attached and work out if you’re on track to achieve them.  Below are a few tools you can use to understand where you're at, and how to get where you want to be:

  • Budgeting: Mint is a helpful free budgeting tool that allows you to import transactions from your online bank accounts for you to categorize.
  • Retirement savings: Nerdwallet has a free calculator to help you understand whether you're on track for the retirement you want. 
  • Home ownership: Bankrate's mortgage calculator can help provide a rough estimate of your potential mortgage payment based on a number of factors.


Step 3: Adjust your plan to get on track & stay there

Explore how you’ll adjust your financial plan (if you need to) to get on track with your goals. You might have to delay some of your goals to make your longer-term savings go further. But before doing that, think about:

  • Ways to earn more (or waste less) so you can save more towards your goals.
  • Making smarter investment choices to take advantage of investment returns and tax breaks and other ‘freebies’ to effectively reduce the cost of your goals. 


Step 4: Plan for the unexpected

Think how your plan for yourself or your loved ones would be affected if:

  • You (or your partner, if you have one) become seriously ill or died unexpectedly.
  • There was a crash in stock market or property prices. Talk to a financial planner about insuring against these disasters. It might cost a lot less than you think.

Step 5: Put the plan into action

Change your saving and spending habits as necessary and set up any investment or insurance products you need to help you reach your goals.

Where possible, be sure to automate your payments into those products. That way you can forget about your longer-term finances between, say, annual reviews – and enjoy your life.

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